WOULD A CORPORATION EVER SEEK TO BUY WATER RIGHTS FROM A LANDOWNER? WHAT SHOULD THE LANDOWNER BE AWARE OF IF AN OFFER IS MADE?

While it may be hard to believe, for some land owners with exclusive ownership to high-quality waters, Wall Street may eventually come knocking on your door. What would they want you ask? Perhaps your water.

Water is the new oil for global financial powerhouses and water is being commoditized and traded in global stock exchanges .Today in addition to being able to buy water rights and purchase lakes on private land, an individual or a corporation can invest in water-targeted hedge funds, index funds and exchange-traded funds (EFTs), water certificates, shares of water engineering and technology companies, shares of multinational private water utilities, shares of multinational banks and investment banks that own water companies, and a host of other newfangled water investments in this U.S.$425 billion industry which is expected to become a U.S.$1 trillion industry within five years. And if one happens to be a tycoon, one can also create his or her own private water districts and water utilities.

"Water" and "water sector" are used broadly to refer to water rights (i.e., the right to tap groundwater, aquifers, and rivers), land with bodies of water on it or under it (i.e., lakes, ponds, and natural springs on the surface, or groundwater underneath), water-purification and treatment technologies (e.g., desalination, treatment chemicals and equipment), irrigation and well-drilling technologies, water and sanitation services and utilities, water infrastructure maintenance and construction (from pipes and distribution to all scales of treatment plants for residential, commercial, industrial, and municipal uses), water engineering services (e.g., those involved in the design and construction of water-related facilities), and retail water sector (such as those involved in the production, operation, and sales of bottled water, water vending machines, bottled water subscription and delivery services, water trucks, and water tankers).

At the same time, Wall Street and multinational banks are seeing water, food, energy, and public infrastructure as safe investment havens with stable returns and financially liquid assets. Simultaneously, they are waking up to the golden opportunity presented by the current reality of a thirstier, water-scarcer world caused by global climate change (and its extreme weather), rapidly depleting groundwater and aquifers, increasing water pollution, soaring water demand exerted by population increases, fast-rising agricultural and industrial uses, and crumbling water infrastructure worldwide requiring billions of dollars annually in maintenance and upgrade.

Often, the picture painted by mainstream media and water-rights activists is too simple -- that of a single corporation (such as Coca-Cola in India or Bechtel in Bolivia) "corporatizing water;" the real story is not just of flamboyant tycoons (such as U.S.'s billionaire and former oil tycoon T. Boone Pickens, or more recently, Hong Kong's real-estate billionaire Li Kai-shing, or Britain's magnate Vincent Tchenguiz) single-handedly grabbing water rights or individual corporations (e.g., Coca-Cola and Nestlé) sucking dry springs and groundwater to the detriment of poor subsistence farmers or slum-dwellers, but vastly complex global networks and partnerships of investment banks and private-equity firms linking together with other institutions (such as public-sector pension funds in Australia, Canada, and Europe; and sovereign wealth funds in the Middle East and Asia) and multinational corporations elsewhere to buy up and control water worldwide.

The New York Times also reported that many cities suffering severe financial strains after having been shut out of the municipal bond markets are cutting back infrastructure upgrade and maintenance projects. Cities are also facing revenue shortfalls attributable to unprecedented housing foreclosures (shrinking property-tax base), decreased employment base, dwindling sales taxes, and reduced funding from state and federal governments. For example, Athens-Clarke County in Georgia delayed a U.S.$221 million bond issue for upgrading its three sewage-treatment plants after Lehman Brothers filed for bankruptcy.

Given the current state of economy in the United States and elsewhere in the world, we can expect more municipal infrastructure and services privatization. Goldman Sachs, Citigroup, the Carlyle Group, AIG Highstar Capital, Credit Suisse (also partnering with GE), UBS AG, JPMorgan Chase, Deutsche Bank, and other multinational banks are amassing "war chests" of several billions of dollars in anticipation of this "tidal wave" of infrastructure (including water) privatization around the world. As a landowner, and perhaps a water rights owner to high quality waters, it is best to professionally evaluate the quality of your waters as well as the legalities of transference of water rights to a potential buyer, and their uses for the waters.